ADB to provide US$465 million for Bangladeshi power sector


Dhaka : The Asian Development Bank (ADB) will provide US$465 million as loan for sustainable development of the power sector in Bangladesh to help ensure reliable electricity supply to the people.

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ADB sources said as part of an initiative to promote sustainable economic growth in the country where nearly half of the total population remains poor, the assistance would make a positive impact on the power sector.

"The programme will support the government's goal for providing reliable electricity for the entire country by 2020 and ensuring better and more affordable services for people," said Pil-Bae Song, head of the project administration unit of the ADB's South Asia Department.

He said, "Only one-third of the households has access to electricity and gets unreliable services due to insufficient power generation, and poor transmission and distribution system."

Pil-Bae Song said Bangladesh's macroeconomic performance has been good over the past decade, but inadequate electricity supply has been a major constraint to the economic growth and poverty reduction. He noted that per capita gross domestic product (GDP) was US$445 in 2005.

"At about 158 kilowatt-hours annually, per capita generation of electricity in Bangladesh is lowest in the world," said the ADB official.

"The current dependable power generating capacity of the country is about 4,120 megawatts, while the country's peak-hours demand is about 4,700 megawatts," he pointed out.

The ADB sources said the power sector programme, which is in line with the ADB's country and strategy programme for Bangladesh, has two financing components.

The loan of US$60 million will be released in two phases. It carries a 24-year term, including an eight-year grace period, and will come from the ADB's Special Fund resources.

The loan will help reform the power sector through financial and organisational restructuring, improved governance, and promotion of private sector partnership.